Canadian consumers are less satisfied with the service they receive from the big five retail banks — namely BMO, CIBC, RBC, Scotiabank, TD Canada Trust — than they were a year ago, according to J.D. Power‘s annual Canadian Retail Banking Satisfaction Study.
The big five’s average 2015 customer satisfaction score slid 12 points to 737 out of 1000 compared to last year.
The average satisfaction score for midsize banks, which include the likes of Tangerine, President’s Choice Financial and National Bank, also took a hit, down 7 points to 759.
In a statement, Jim Miller, J.D. Power’s banking practice senior director, tied reduced satisfaction scores to increasing account fees. The study found that 46% of big five bank customers now pay a monthly maintenance fee on their chequing account, compared to 40% in 2014, and that the average fee has increased 8% year-over-year to $13.15.
Customers rated the fairness of their bank’s fees at 6.5 on average, down from 6.7 in 2014.
“When a retail bank increases fees and trims back on its core services to customers for the sake of increasing profits, they may be losing touch with one of the most important aspects of their business survival — the customer,” Miller said. “Retail banks that make their short-term earnings at the expense of their customers are trading long-term customer loyalty for short-term profits.”
He also pointed to increasingly lengthy wait times both at local branches and at call centres. In-branch, the average customer wait time was 5.7 minutes in 2015, up from 3.8 minutes last year. On the phone, it was 6.5 minutes, up from 3.7 minutes last year.
The biggest decline in satisfaction scores were in how well customers felt their problems were resolved by their bank. Customer satisfaction with problem resolution among the big five was down 33 points to 633 out of 1000. At midsize banks, it was down by 62 points to 586.
However, problems happened slightly less frequently than in the previous period, with an incidence rate of 13% at the big banks and 10% at midsize ones, down from 14% and 11% in 2014 respectively.
“Banks that don’t provide enough value for what their customers are paying are likely to find their customers switching to low-cost competitors, some of which provide great customer service,” Miller said.
The numbers backed him up: the percentage of big five customers who say they “definitely will or probably will” switch banks in the next 12 months was up two percentage points at 9%. Among midsize bank customers, 10% said they would definitely or probably switch, up one point from last year.
The study is based on responses from 14,000 Canadian retail banking clients who use a primary financial institution for personal banking. Responses were collected through April and May this year.
TD ranks first for 10th consecutive year
Despite the overall downward trend, TD Canada Trust led the pack in customer satisfaction for the 10th straight year with a score of 746. The study found that TD performs above average in each of the seven factors it reviews, especially facilities.
From J.D. Power’s 2015 Canadian Retail Banking Satisfaction Study
“Customer service is something we work hard at every day, and we’re incredibly proud to be celebrating ten years of leadership,” said TD president and CEO Tim Hockey, in a statement. “We are so thankful to our customers for this important acknowledgment.”
Tangerine ranked highest among midsize banks, for the fourth year in a row, with a score of 811. The study highlighted its high scores in product, personal service, self-service and communication categories.
From J.D. Power’s 2015 Canadian Retail Banking Satisfaction Study
“Creating a simple and convenient everyday banking experience for our clients is at the core of everything we do, so we are extremely honoured to be recognized by J.D. Power for a fourth straight year,” said Peter Aceto, President and CEO of Tangerine, in a statement.
Both top performers scored significantly lower than they did in 2014. TD fell 17 points from 763, while Tangerine fell 25 points from 836.
